Karoon Gas Takeover Looming With Brazilian Oil Bonanza: Real M&A

The prospect of new oil discoveries in the same region that yielded the Western Hemisphere’s biggest find in three decades is transforming Karoon Gas Australia Ltd. into a takeover target.

Exploring in Brazil’s Santos Basin, in waters south of Sao Paulo, Karoon may be sitting on almost 1 billion barrels of oil. Together with fields in Peru, these untapped South American assets alone are worth $1.6 billion, 35 percent more than Karoon’s market value yesterday, said Macquarie Group Ltd. No peer in the developed Asia-Pacific region is projected to gain value faster, as analysts estimate Karoon will trade 61 percent higher in 12 months, according to data compiled by Bloomberg.